Fon­terra boosts in­take to 2b litres

FON­TERRA HAS sur­passed its tar­get of in­creas­ing milk sup­ply to 1.9 bil­lion litres and is now track­ing closer to 2 bil­lion. Two bil­lion litres means the com­pany sits just be­low Mur­ray Goulburn as Australia’s largest pro­ces­sor, with the Aus­tralian co-op’s sup­ply fall­ing to about 2 bil­lion as a re­sult of its sup­plier ex­o­dus. Mr De­doncker said the com­pany had set a tar­get of in­creas­ing milk sup­ply to about 1.9 bil­lion litres and had achieved that in re­cent weeks. “Last year we fin­ished at 1.5 bil­lion litres and now we are track­ing closer to 2 bil­lion,” he said. “A lot of that is com­ing here to Stan­hope but much is also go­ing to Dar­num and to Cob­den and Sprey­ton in Tas­ma­nia. “That is cre­at­ing the net milk we need to run our fac­to­ries ef­fi­ciently and to de­liver profit at the farm gate.” Asked where the com­pany was po­si­tion­ing it­self with in­dus­try leader Mur­ray Goulburn los­ing sup­pli­ers, Mr De­doncker said its am­bi­tion was not to be num­ber one, but it could end up tak­ing the lead. “We have a clear strat­egy and we are im­ple­ment­ing that strat­egy,” he said. “We may hap­pen to be the largest but that’s not our fo­cus. “Our fo­cus is to get the right amount of milk, cheese, whey, nu­tri­tion­als. “If the out­come is be­com­ing num­ber one, that’s what it will be.” Fon­terra opened early this sea­son with $5.30/ kg of milk solids and then stepped up to $5.50 kg. Mr De­doncker said Fon­terra was con­fi­dent the price was re­flec­tive of mar­ket forces. “But we won’t move early, we will only move when we know we have made those de­ci­sions that are re­turn­ing the earn­ings. “But we feel it will be a great year for farm­ers.” He said the po­ten­tial was to move to $5.80/ kg MS this sea­son. “The $5.50 is at­tract­ing farm­ers to Fon­terra. I think our be­hav­iour is also do­ing that as well. “We have com­pletely changed our be­hav­iour in the way we lis­ten to our farm­ing com­mu­nity and the de­ci­sions that we make.” Mr De­doncker was ap­pointed to his po­si­tion just after the milk price crash and ad­mit­ted that meet­ing face-to-face with farm­ers af­fected by the price cut was “bru­tal”. “We’ve learnt a lot from that.” He said he was now of­fer­ing a dif­fer­ent ap­proach and the com­pany was “look­ing them in the eyes”. “If we don’t take a step to­wards farm­ers and pro­tect their in­ter­ests there is go­ing to be a mas­sive prob­lem. We have to take shocks out. “Farm­ers want trans­parency and they want to know that the price they are get­ting re­flects what is go­ing on in the world.” He said the com­pany had im­proved its com­mu­ni­ca­tion with its sup­pli­ers, send­ing a four­page re­port out ev­ery four weeks.